ORGANISING

Organizing As A Management Function

Organizing and organization structure

Organizing
• The process of arranging people and other resources to work together to accomplish a goal.

Organization structure
• The system of tasks, workflows, reporting relationships, and communication channels that link
together diverse individuals and groups. It refers to the differentiation and integration of
activities, authority , role and relationships in organisation.
• Pattern of relationship among various parts of the organisation.
• Organisation structure is the totality of formal and informal relationships.
In the words of Louis Allen:

“Organising can be defined as a process that initiates

implementation of plans by clarifying jobs and working
relationships and effectively deploying resources for
attainment of organistional goal”
Organizing Viewed In Relationship With Other
Management Functions
ORGANISATINAL STRUCTURE

An organisational structure denotes the pattern of relationship among the position

and job within an organisation. It provides a platform on which employees of
various levels performs their action.

“Organisational structure refers to the framework within which managerial and

operating tasks are performed. “

1. It specifies the relation between people, work and resource.

2. A good organisational structure should be dynamic so that it can
change and adjust as per situations or conditions.

As per PETER DRUCKER:

Organisational structure is an indispensible means and the wrong structure will
seriously impair business performance and even destroy it
Advantages of Organising:-
1. Specialisation:-
organising offers advantages of specialisation because it divides broad
activities into smaller activities and each person performs only these
smaller activities.
2. Role clarity
Need For Organisational Structure:-
1. Growth in size of organisation:-
When an organisation grows in size, number of employees increases
automatically. Similarly, more functions are may be added in the organisation. In
order to manage this increased number of employees and functions a suitable
structure is needed.
2. Overcoming Communication Problem:-
In a large organisation due to a lengthy structure communicative relationships
between decision making authority and implementation department weakens.
Establishment of an organisational structure results in setting up reporting
relationship which enhances communication among employees.
3. Overcoming Coordination Problems:-
Organisation structure is required to ensure coordination between various
functions and sub functions of the organisation. If there is a coordination among
functions and sub functions, the organisation will lead to achieve its task
effectively and efficiently.
4. Need for Control:-
Organisational Structure facilitates this by prescribing
which position is subject to control by which position.
SPAN OF MANAGEMENT:-
Span of management is also known as span of control.

“Span of management directly refers to the number of

subordinates managed by an superior”. Graicunas , a french
management consultant , suggested fixed number of
subordinates based on mathematical calculation.According to
him, most ideal span for a manger is six subordinates .
 FACTORS AFFECTING SPAN OF
MANAGEMENT:-
1. Capacity of superior
2. Capacity of subordinate
3. Nature of work
4. Communication Technique
FORMS OF ORGANISATION:-

FORMAL
ORGANISATION
ORGANISATION
INFORMAL
ORGANISATION
FORMAL ORGANISATION:-
“Formal organisation is a consciously and deliberately designed system
of well defined jobs, each bearing a definite
authority, responsibility and accountability.”
or
“Formal organisation refers to a organisation structure which is
designed by the management to accomplish a particular task.”
FEATURES:-

1. Formal organisation is framed by top level management.

2. It is designed to fulfil certain requirements- performance of
activities for achievement of organisational goal.
3. It is based on principle of division of labour and efficiency
in operation.
4. It focuses more on synchronised performance of the
employees rather than individual.
5. Coordination among members and their control are well
specified through organisational processes, procedures etc.
6. Assigns authority and responsibility to the people. Based on
the degree of authority and responsibility, people are placed in
hierarchy.
 INFORMAL
ORGANISATON:-

Informal Organisation is a pattern of social relationships of people at work which is

not prescribed formally.

“Informal organisation is an system of relationships that develops spontaneously

as employees meet and form relationships”.

Good manager recognise that the informal organisation exists whether they want it
or not and can use it not only to:
1. Reinforce the formal organisation but also
2. Harness its energy to improve productivity.
Features of Informal Organisation:-

1. Informal Organisation is a natural outcome at the

workplace. It is not designed and planned.
2. It is created on the basis of some similarity among its
members. The bases of similarity may be age, place of origin,
caste, religion, personality characteristics, liking or disliking,
etc.
3. Behaviour of members of the informal organisation is
coordinated and controlled by group norms and not by the
norms of the formal organization.
4. Membership in an informal organization is voluntary.
Types of Organisational Structures:-
The type of an organisational structure adopted by an organisation depends on nature and types of activities performed by an organisation.
It can be classified under two heads.

FUNCTIONAL LINE

DIVISIONAL LINE & STAFF

MATRIX TEAM
Line Organisation Structure
Under this form, similar activities are performed at a particular level. Also known as vertical or
scalar organisation. Hierarchy is derived from scalar process, there must be a single head who
commands. It is straight and vertical.

Production Manager

Foreman A Foreman B Foreman C Foreman D

Workers Workers Workers Workers

Advantages and Disadvantages

Advantages Disadvantages
a. Simplicity a. Autocratic approach
b. Prompt Decision b. Lack of specialisation
c. Discipline c. Problems of coordination
d. Orderly communication d. Succession Problem
e. Easy supervision and control
 Line and Staff Organisation
When both line and staff authorities are included in an organisation, it is called
line and staff organisation. The individual who constitute the staff in an industrial
organisation are experts who have no authority but whose function is largely
advisory. When the work of executive increases , its performance requires
services of specialists who have the right to recommend , but have no authority
to enforce their preference on other departments.
FUNCTIONAL STRUCTURE:-

“Functional Structure refers to grouping of jobs of similar nature under

one department.”

1. All related and similar functions are grouped under a similar

department.
For example- In manufacturing enterprise, all the jobs related to

production are grouped under production department,

jobs related to purchase in purchase department, jobs

related to finance under finance department.

2. These departments may be further divided into sections.

3. Companies like Britannia Industries, Bata, MarutiUdyog ltd.
Follows this type of organisational structure.
Advantages and Disadvantages

Advantages Disadvantages
a. Facilitates specialization a. Absence of unity of command
b. Benefits of large-scale b. Fixing responsibility is difficult
operations c. Costly
c. Facilitates effective d. Creates confusion among
coordination workers
d. Operational flexibility e. Delays in decision-making
e. Ensures effective supervision and limited discipline within
the departments
 Suitability of Functional Structure:-
Functional Structure is suitable in the following cases:
1. When the size of the organisation is large.
2. When organisation has to carry out diversified
activities.
3. When the task requires a high degree of specialisation.
 DIVISIONAL STRUCTURE:-
“When jobs related to one product are grouped under one department,
it is termed as divisional structure.”

Divisional organisational structure is the structure in which activities

are grouped on the basis of products or geographical territories. A
product division is headed by a divisional head.

For example: Patanjali is an organisation which is dealing in variety

of
products. They can create various divisions for various

products like, they can create a seperate division for

cosmetics and another for food materials.
Divisional Organisation Structure
 SUITABILITY OF DIVISIONAL
STRUCTURE:-

1. When large variety of products are manufactured using

different productive resources.
2. When an organisational plans to add more departments or
more line of products in future.
3. When it is important to determine profit and loss made by
each product line so that decision can taken to expand,
continue or close a particular product line.
 MATRIX STRUCTURE:-
Matrix organisational structure is a structure which is a
combination of two complementary structures-

“Project Structure- It is a structure in which divisions are

created on the basis of projects undertaken by an
organisation at a time”.
“Functional Structure- It refers to grouping of similar nature
of jobs under one department”

1. Project heads are appointed for each project.

2. Each functional staff has its two bosses- functional
superior and project manager.
Potential advantages of matrix structures:
• Better cooperation across functions.
• Improved decision making.
• Increased flexibility in restructuring.
• Better customer service.
• Better performance accountability.
Potential disadvantages of matrix structures:
• Two-boss system is susceptible to power struggles.
• Two-boss system can create task confusion and conflict in
work priorities.
• Team meetings are time consuming.
 TEAM BASED:-
A team is a small group of individuals with unique features. X

“A team is a small number of people with complementary skill

who are committed to a common purpose, performance goals ,
and approach for which they hold themselves mutually
accountable.”
Types of teams:-

1. Problem-solving Team- it is a team is a team which is

constituted to solve specific problems which an organisation
may face
2. Cross functional Team- They aim to solve the problems in
those areas which can not be solved by functional departments.
3. Self-managing Team- Self directed team is a team which
controls its all function by its own.
 DEPARTMENTATION:-
“It is also known as departmentalisation. It involves
creating various departments, divisions, and sections by
grouping similar activities together”.

Problem here is, in what basis the departments should be

created?

However the most commonly used bases are

1. products
2. territory
3. process
4. customer
1. Product:-
Product departmentation involves grouping of activities
necessary to produce a product or product line.
2. Territory:-
Geographical departmentation is useful to large sized
organisations having activities which are geographically spread
such as baning, insurance etc. Example- Indian Railways, LIC.
3. Process:-
As per process departmentation, departmentation is done on
the basis of processes involved in production.
For example- In a textile industry departments can be made on
the basis of weaving, spinning, dyeing, finishing etc.
4. Customer:-
It is market orientated departmentation. In this departments
are created on the basis of markets served or distribution
channels used.
Functional Departmentalization

• A form of organization that groups a company’s activities around essential

functions such as manufacturing, purchasing
sales, or finance.
__ The grouping of common or homogenous activities to form an
organisational unit
Functional Departmentation

Board of
Directors

Managing
Director

Production Marketing Finance Personnel

Marketing
Advertising Sales
Research

Newspapers
Radio& T.V.
& Magazine
Territorial Departmentalization
It is an arrangement of departments according to geographic
area served. In this organization structure, all the activities
for a firm in a given geographic area report to one manager,
often with a title such as “Regional Vice President”.
Marketing divisions often use territorial departmentalization;
the sales force may be divided into the northeastern,
southeastern, Midwestern, northwestern and south western
regions.

CEO and President

Vice President Vice President Vice President Vice President Vice President
Eastern Zone Central Zone Northern Zone Southern Zone Western Zone
Product-Service Departmentalization

Product- Service Departmentalization is the arrangement of

departments according to the products or service they
provide. When specific products or services are so important
that the units that create and support them almost become
independent companies, product departmentalization makes
sense.e.g.(Plastic, Metal , chemical division)etc.

Chairman and Chief Executive

Officer

Two Wheeler Car Trucks Bus

Division Division Division Division
 Customer Departmentalization
It creates an organization structure based on customer
needs. When the demands of one group of customers differ
significantly from the demands of another, these kind of
departmentalization occurs. Many insurance companies, for
example, organize their efforts into consumer and
commercial departments.( Large garments store)

Marketing Manager

Wholesale Retail Import Export

 AUTHORITY & RESPONSIBILITY:-
“Authority refers to the legitimate right of a position
holder to give orders to others and get these orders obeyed”.
This right puts a manager in a position by which he regulates
the behaviour of his subordinates to act or not to act in certain
ways. Authority is the right to take action, utilize
organizational resources and exact obedience from
subordinates.

“Responsibility is the obligation of a position holder to carry

out assigned activities to the best of his/her ability”.
Responsibility arise due to assigning of duties by superiors.
Responsibility generally falls upon subordinates of authority
holders.
 DELEGATION OF AUTHORITY:-
“Delegation of authority involves giving authority to
various organizational positions to get things done”.

1. It is a downward transfer of authority from a superior to

a
subordinate.
2. Delegation is a pre-requisite foe the efficient functioning

of an organisation.
3. It enables a manager to concentrate on higher priority
activities.
4. The person who delegates is known as delegator and
other person as delegatee.
5. The concept of delegation is based on principle of
Division of work.
Delegation is a process which enables a person to
assign work to others with adequate authority to do
it.

Importance of Delegation
It is the most important method of training
subordinates and building morals.
STEPS INVOLVED IN DELEGATION:-

1. Determination of result expected

2. Assignment of duties
3. Authorization for action
4. Creation of accountability
Advantages of Delegation
Delegation of
Saving of Work Authority
Basis of effective
functioning

Revolution of work
Efficient Running
Advantages of
Delegation
Interest and Initiative Satisfaction to
subordinate

Opportunity for
Expansion and Development Benefit of
Diversification specialized service